Tree plantations that use significant amounts of the government’s financial and human resources have been established in Indonesia. Unfortunately, the result has not been satisfactory. One of the primary reasons for this is that the government acted unilaterally in determining the locations and tree species planted, especially in production forest areas. To address this problem, the government has involved local communities in selecting locations and tree species through a “People’s Plantations” program.
In selecting planting locations and species to be planted, a number of physical, spatial, and socio-economic analyses have been conducted. Physical analysis helped identify potential land units suitable for plantation areas at different locations. In addition, spatial analysis using GIS helped determine the suitability of these land units based on the proximity of the land units to the roads, villages, and product markets or industries. Socioeconomic analysis indicated the locations and tree species preferred by the local community and other stakeholders, which were identified through interviews. Further, the selected tree and crop species were analyzed financially using Benefit Cost Ratio (BCR), Internal Rate Return (IRR), and Net Present Value (NPV).
The results of this research show that the local communities in villages have different preferences about selecting locations for tree plantations. These differences are due to the differences in the environmental conditions at each village. Likewise, the local community and non-community stakeholders have different preferences in selecting locations for tree plantations. The reason is that the non-community stakeholders ranked the characteristics of lands and weighted the criteria based on scientific assumptions, whereas the local community stakeholders ranked the characteristics of lands and weighted the criteria based on the environmental conditions and practical experience in and around the villages.
Furthermore, based on the aggregate community preferences and after applying the General analysis, i.e. the analysis used to either clean up small erroneous data in the raster or to generalize the data to get rid of unnecessary details for a broader analysis, the production forest areas in Banjar district were ranked according to priority for tree plantation locations. Priority 1 consists of 11 land units with a total land area of 37,027.90 ha (38.03%), Priority 2 occupies 43 land units with a total land area of 40,655.44 ha (41.75%), and Priority 3 comprises 32 land units with a total land area of 19,120.83 ha (19.64%).
Based on the interviews with the community stakeholders, prioritized tree species for the People’s Plantations program were determined to be rubber (Hevea brasiliensis) 100%, candlenut (Aleurites moluccana) 63.7%, coffee (Coffea sp.) 53.2%, durian (Durio zibenthinus Murr.) 46.8%, teak (Tectona grandis) 33.1%, and langsat trees (Lansium domesticum) 12.1%, while the non-community stakeholder prioritized rubber 97.5%, mahoni (Swietenia macrophylla) 52.5%, durian 45%, sengon (Paraserianthes falcataria) 35%, candlenut 32.5%, and teak trees 27.5% for the People’s Plantations program.
The matching results of the land units to rubber tree requirements showed that all land units are not suitable for rubber tree plantations. This is because some characteristics of the land units do not meet the rubber tree requirements. These characteristics are: (1) temperature regime (t) particularly annual average temperature, (2) water availability (w) especially the length of dry months, (3) rooting conditions (r) including soil drainage and rooting depth, (4) nutrient availability (n) specifically availability of phosphate (P2O5); and (5) terrain (s), particularly the number of rock outcrops.
Nevertheless, the local communities still considers the rubber trees as their favorite species for a tree plantation. The reasons for this are they are familiar with cultivating the rubber trees, they get income (cash) every day from the rubber trees, they have a shorter time to harvest latex from rubber trees than from growing other tree crops, and they also get cash from rubber wood at the end of rotation. In addition, based on the financial analysis, with a Social Discount Rate 12% per year, rubber trees are economically viable to cultivate either with a hired labor or with a community’s own labor system. With the hired labor system, NPV = Rp.80,989,226, BCR = 1.78, and IRR = 43.34%. With the community’s own labor system, NPV = Rp.176,044,446, BCR = 21.29, and IRR = 66.35%. The three criteria meet the feasibility condition which states that a project or an activity should “go” when NPV > 0, BCR > 1, and IRR > current social discount rate.
In addition, with the social discount rate 12% per year, the Hartman model failed to maximize NPV in rubber tree plantations with a rotation age 25 years either with the hired labor or with the community’s own labor system because until a rubber tree is 25 years old, NPV is still increasing, and this indicates that rubber trees provide significant income from latex. However, if the social discount rate is lowered from 12% to 7% or 8% per year, the maximum NPV (the optimum rotation) would be achieved when the rubber tree is 23 years old, and if the discount rate is lowered from 12% to 1% - 6% per year, the maximum NPV occurs when the rubber tree is 22 years old. Those maximum NPVs are only achieved if the income from the rubber trees is also lowered with the hired labor system. It is likely that the optimum rotation is affected by a combination of income and social discount rates.
The most profitable agroforestry system implemented by the local communities is the combination of rubber trees and ginger. However, the local communities also grow a combination of rubber trees and rice because rice is the main source of their staple food. In addition, the local communities grow a combination of rubber trees and peanuts to increase soil nitrogen fertility. The conclusions of this study are that the most suitable and profitable lands for tree plantations are the first priority areas and this study’s analyses indicate that they should be planted with a combination of rubber tree species and ginger to optimize profit.